Compliance Blog

For credit union compliance professionals, February means that the annual Home Mortgage Disclosure Act (HMDA) reporting deadline is approaching. As we creep closer to the reporting deadline, the NAFCU compliance team often receives questions regarding the applicability of Regulation C (which implements HMDA), so let’s take some time to refresh our knowledge on this topic.

Section 1003.4 of Regulation C requires credit unions to collect, record and report data regarding applications it receives for “covered loans” – i.e. closed-end mortgages or home-secured open-end lines of credit – during the calendar year. However, there are some exemptions from the requirement to collect, record, and report HMDA data, such as when a credit union’s assets or previous covered loans fall below a certain threshold. The thresholds have changed a bit in recent years, which can sometimes cause confusion among credit union compliance professionals.

The 2021 Thresholds

First, let’s discuss the asset threshold. For 2021, the asset threshold was set at $48 million. This threshold took effect on January 1, 2021 and applied when determining if a credit union was required to collect, record, and report data for applications received during the 2021 calendar year. Thus, credit unions with assets of $48 million or less (as of December 31, 2020) were exempt from the data collection requirements under Regulation C.

Aside from the asset thresholds, there are activity thresholds for both closed-end mortgages and home-secured open-end lines of credit. These thresholds are independent of each other, and thus it is possible that a credit union may be required to collect, record and report data on one type of credit while being exempt from doing so on the other type of credit. Importantly, these thresholds require a credit union to look back at credit originated in the preceding two years, and to determine if the number of covered loans meets or exceeds the threshold that has been set for the current reporting year (not the threshold that was in place during those preceding years). Here is a break down:

Closed-end mortgages: The CFPB set this threshold at 100 closed-end mortgages back in 2020 (as we blogged about then) and has not changed it since then. Thus, when determining if a credit union was required to collect, record and report data on closed-end mortgage applications received in 2021, a credit union would look at the number of closed-end mortgages it originated in both 2019 and 2020. If the credit union originated 100 or more closed-end mortgages in both of those years, then it would be required to collect, record and report HMDA data for closed-end applications received in 2021. If the credit union originated fewer than 100 closed-end mortgages in either 2019 or 2020, then it would be exempt from the data collection, recording and reporting requirements for closed-end mortgage applications received in 2021.

Open-end Lines of Credit: For home-secured open-end lines of credit, the CFPB set the threshold at 500. Thus, when determining if a credit union was required to collect, record and report data on applications for home-secured open-end credit received during 2021, the credit union would look at whether it originated 500 or more home-secured open-end lines of credit in both 2019 and 2020. If the credit union originated 500 or more home-secured open-end lines of credit in both of those years, then it would be required to collect, record and report HMDA data for covered open-end credit applications received in 2021. If the credit union originated fewer than 500 home-secured open-end lines of credit in either 2019 or 2020, then it would be exempt from the data collection, recording and reporting requirements for open-end credit applications received in 2021.

New Thresholds for 2022

On January 1, 2022 the thresholds changed. It is important to note that, despite the requirement to “look back” at the number of covered loans originated in the preceding two years, the thresholds are actually forward-looking. In other words, the threshold that takes effect on January 1 of a given year determines whether the credit union needs to collect, record and report HDMA data moving forward for that calendar year.

This also sometimes confuses credit unions, because for most credit unions the reporting of HMDA data occurs in the subsequent calendar year (larger institutions may be required to report quarterly)– for example, data from 2021 is reported to the CFPB in the first quarter of 2022. Thus, when the thresholds change on January 1, some credit unions might erroneously believe the new thresholds apply to their reporting in the first few months of that year, when in reality that reporting would discuss data from the previous year and would be covered by the previous year’s thresholds.

The thresholds which took effect on January 1, 2022 will determine whether a credit union is required to collect, record and report HMDA data for applications received during the 2022 calendar year – the reporting of which will occur in early 2023. These thresholds will not affect 2021 reporting. Here are the thresholds:

Asset threshold: Effective January 1, 2022, the CFPB raised the asset threshold to $50 million. Thus, credit unions which had assets below $50 million as of December 21, 2021 will not be required to collect, record or report HMDA data.

Closed-End Mortgages: The threshold for closed-end mortgages remains at 100. Thus, a credit union will be exempt if it originated fewer than 100 closed-end mortgages in either 2020 or 2021.

Open-end Lines of Credit: Effective January 1, 2022, the open-end credit threshold lowered from 500 to 200. Thus, a credit union will only be exempt from collecting, recording and reporting data on applications received in 2022 for home-secured open-end credit if the credit union originated fewer than 200 of those loans in either 2020 or 2021. A credit union that originated 200 or more home-secured open-end lines of credit in both 2020 and 2021 will be required to comply with the collection, recording and reporting requirements in 2022 for this type of credit.

Hopefully we’ve disentangled some of the overlapping dates and thresholds for any credit union compliance professionals out there who were previously struggling with this issue. NAFCU member credit unions can always submit their HMDA-related questions (or other compliance questions) to the NAFCU compliance team by emailing Compliance@nafcu.org.

Editor's Note: A previous version of this blog indicated that a credit union's originations must fall below the threshold in both of the preceding two calendar years to be exempt from HMDA requirements in the current year. The blog has been corrected to reflect that the exemption applies if the credit union's originations were below the threshold in either of the preceding two calendar years. 

Programming Note: NAFCU will close at noon on Friday, February 18th, and will be closed on Monday, February 21st in observance of Presidents' Day. NAFCU will reopen at 9 am on Tuesday, February 22nd. The team will resume blogging next Wednesday.